Tremors and New Opportunities Ahead in 2012 for the Network-based App Delivery Optimization Market

The game is afoot. Riverbed announced that they had “purchased certain assets of Expand Networks, including its intellectual property, out of liquidation in Israel. Riverbed did not purchase the corporate entity of Expand Networks and has not assumed any of Expand’s liabilities, obligations or contracts.” Last October Expand Networks had gone into liquidation under the supervision of the District Court in Haifa, Israel. Riverbed made an offer for the intellectual property, which was accepted. Riverbed did not provide a figure, but the rumor is a bargain price of around $10 million dollars. Expand was one of the early players in the WAN optimization market, but failed to keep pace when other vendors entered the market. In our EMA Radar for WAN Optimization Controllers: Q1 2011 published in March 2011, Expand Networks finished far below the other players in terms of overall product strength demonstrating that the feature set was not keeping pace with the majority of players in the market.

In the case of Expand the clock ran out, leaving investors and debtors holding the bag, but on a more positive note, there has been a trend at least in the US of venture capitalist firms building portfolios for investment purchases around operational areas such as WAN optimization and load balancing. Back in December, Blue Coat entered in an agreement to be acquired by an investor group led by San Francisco-based private equity investment firm Thoma Bravo, LLC. The transaction was valued at $1.3 billion. In this case the move is similar to what Avaya did taking a public company private. It provides the opportunity to do some internal restructuring and takes the pressure off of being a public traded company at the whim of Wall Street investors.

Just this week KEMP Technologies, a load balancer company focused on the SMB market, announced Edison Ventures made a $7.5 million dollar investment as part of a joint $16M buy-out with Kennet Partners and Orix. The money from the sale is for the support of product development, acceleration of sales expansion and the expansion of the company’s global presence. They have promoted Ray Downes as their new president who formerly headed up the EMEA initiative for KEMP and has been credited for growing their foreign presence in a lean market. In a conversation with the company, this is being viewed as very positive event giving them an influx of cash that will allow them to grow the business more quickly than had been previously possible. They have already added seven new hires and are looking to add some more senior staff.

In our recent EMA Radar for Application Delivery Controllers and Load Balancers: Q4 2011 published in October 2011, EMA found that KEMP offered a competitive, focused feature set at a price point that matched their target audience. This influx of cash should help flesh out some of the missing pieces like more advanced features and deeper integration with network monitoring solutions. In their 6.0 release of their platform, that they also announced this week, new features include:

Pre-configured application templates for use with Microsoft Exchange 2010, SharePoint and Microsoft Lync, along with a range of other applications including those delivered via HTTP.

Support for IPv6 across all LoadMaster hardware and virtual appliance platforms.

Denial-of-service (DoS) mitigation features to defend against layer 7 DoS attacks on web-based applications and servers.

Support for the creation of whitelists or blacklists for all virtual services, allowing administrators to filter traffic at a granular level, including IP addresses at the Internet, Extranet or Intranet levels.

So things are happening in the network application delivery optimization market. The market remains competitive and those that don’t keep up are assimilated. The rate of change is putting strain on the network architecture. Solutions that address the ability to keep networks up and running will continue to remain relevant in the coming years, despite the shifting sands of change. 2012 looks to be anything but dull.